People who find it difficult to buy physical gold due to high costs are rapidly switching to buying digital gold. Digital gold can be purchased for as low as Re 1 and there are no making charges, unlike gold jewellery. Further, an investor can exchange the digital gold for an equivalent weight of gold coins or sell it and get the money in a bank account, as per his/her choice and convenience.
If you are also interested in buying digital gold around Akshaya Tritiya or Diwali, then here is all that you need to know.
Buying digital gold online
Currently, you can buy digital gold from MMTC-PAMP, SafeGold, Augmont Gold and many such companies. An individual can buy digital gold by visiting the websites of these entities. Many of these companies also have tie-ups with payment apps such as Paytm, Google Pay and PhonePe to buy and sell digital gold.
Nowadays, some jewellers have also started offering digital gold. The facility is offered through a tie-up with a digital gold brand or through an in-house brand. For example, Tanishq has tied up with SafeGold to offer customers digital gold. On the other hand, PC Jewellers has built a platform, known as PCJ Digital Gold, to offer this investment.
Buying digital gold on Paytm, PhonePe, Google Pay
If you are an active user of common payment apps like Paytm, PhonePe or Google Pay, then buying digital gold is easier. An individual needs to open the app and select “Digital Gold” or “Gold” option in the app. The next step is to enter the purchase amount. The app also allows purchases in grams. Once the input (Rupee or gram) has been entered, make the payment (via UPI, mobile wallet, debit card, etc). After the payment is successfully made, the gold is added to the customer’s digital gold account.
Paytm has a tie-up with MMTC-PAMP. PhonePe allows its users to buy digital gold from MMTC-PAMP or SafeGold. The difference in the price of the gold at these platforms is very minimal.
Do note that the prices quoted by these apps are typically valid for 5-7 minutes and are exclusive of GST, which is charged at 3%.
Google Pay has tied up with MMTC-PAMP to offer digital gold to its users. The price on the platform includes taxes and refreshes every 5 minutes.
Minimum and maximum purchases: All three payment apps have different terms and conditions regarding maximum purchase. Google Pay has a daily limit of Rs 50,000. The minimum purchase can be of Re 1. However, gold accumulation plan (GAP) accounts having more than Rs 49,999 worth of gold are required to undergo KYC norms before making any new purchases.
According to PhonePe, an individual can buy gold for a minimum of Re 1 and a maximum of Rs 49,999 per purchase. The maximum worth of gold that can be stored on PhonePe is Rs 2 lakh.
Paytm allows an individual to buy gold for a minimum of Re 1 and a maximum of Rs 1 crore in a single transaction. If an individual buys digital gold of Rs 2 lakh or more, PAN details have to be submitted.
Maximum holding period: The maximum holding period for digital gold can vary company to company. MMTC-PAMP allows a buyer to store gold in a digital locker for 5 years, while SafeGold allows it for 7 years.
Storage charges: Once digital gold is bought, the company (SafeGold/MMTC-PAMP) will store the gold in a secure locker. Hence, one must know the charges that apply to storing gold in these lockers. According to the PhonePe app, both MMTC-PAMP and SafeGold allow the buyer to keep the gold for upto 5 years for free. After that, SafeGold charges 0.3% per annum as a custody fee. In case of MMTC-PAMP, after 5 years, one needs to either sell the gold or exchange it for a gold coin.
Buying digital gold via websites
Digital gold can be purchased from the websites of MMTC-PAMP, SafeGold, Augmont or many other similar entities. However, the terms and conditions can differ. A buyer might have to undergo the KYC process if the purchase is above a threshold. For SafeGold, PAN is a must when an individual buys for more than Rs 2,000. According to Augmont, PAN is required if buying exceeds a certain threshold limit. However, this limit is not mentioned on its website. On the other hand, “MMTC-PAMP does not require the customer to complete KYC to open a GAP account or buy digital gold,” says the website.
Minimum and maximum purchase amount: MMTC-PAMP and Augmont allow purchases from Re 1. However, SafeGold has a minimum purchase amount of Rs 10. There is no limit on the maximum amount of gold that can be purchased from here.
Selling digital gold: Selling gold is easier on the payment apps. But the same cannot be said for these websites. According to MMTC-PAMP, the sale of accumulated gold can be done when the “sale back window” is active. “Open sale back window is the period during which the customer can place a request for sale of their digital gold. MMTC-PAMP reserves the right to close the open sale back window at its discretion. Customers would still be able to place requests to redeem their digital gold in the form of gold coins,” says the website.
Augmont says, “You are not allowed to sell the gold or silver until 48 hours from the purchase time for security reasons.”
SafeGold has a waiting period of 48 hours from purchase before selling, “for security reasons”. Further, the website says, “Your PAN is required once your cumulative sell transaction value crosses Rs 500. This is done to verify that you actually own the bank account (by matching the name retrieved from the bank account against the name retrieved from the PAN) to which you wish to withdraw your sale proceeds to (via NEFT or UPI).”
Storage charges: The free storage period and charges are the same as mentioned above for payment apps.
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